Nikkei opens higher on tech strength

NEC is among Japanese tech stocks on the rise Thursday

TOKYO, Japan -- Tokyo stocks opened higher Thursday on gains in semiconductor issues such as Toshiba, NEC and Hitachi.

This followed rises in U.S. techs after top brokerage Merrill Lynch turned bullish on battered global chipmakers.

The Nikkei 225 stock average was up 1.65 percent or 196 points to 12,156.28 by mid-morning.

The broader, capital-weighted TOPIX index gained about 15 points or 1.27 percent to 1,221.51.

Australia, Korea, Taiwan also higher

Elsewhere in the region, markets were firmer also in Korea, Australia and Taiwan. New Zealand was down slightly.

Taiwan's market is seen to benefit from growth in key issues such as TSMC, following the Merrill Lynch report.

But the overall Asian market's upside is seen limited due to investor jitters in the midst of the high-tech quarterly earnings season, analysts said.

"I'm sceptical about the Nikkei's rise beyond a resistance of 12,200, its 25-day moving average," said Yutaka Miura, deputy manager of Shinko Securities' equity information section.

Toshiba jumps on tech bullishness

On Wednesday, the average rose for a second day and ended up 98.56 points or 0.83 percent at 11,959.33, having risen 3.28 percent since it hit a 16-year closing low on Monday.

Toshiba, Japan's top chip maker jumped 5.02 percent to 628.

Tokyo Electron Ltd, a top maker of chip-manufacturing equipment, is a Japanese high-tech company due to announce earnings later in the day.

Daiwa Bank extended gains in heavy volume, rising 1.39 percent to 146 yen. The loss-making bank late on Wednesday announced that it would set up a joint holding company by the end of March 2002 with two regional banks, Kinki Osaka Bank and unlisted Nara Bank.

Banks to cut workers

The banks, all based in the Kansai area of western Japan, said they are aiming to cut more than 3,000 workers by March 2005 as part of restructuring aimed at saving $240 million (30 billion yen) a year.

Selling by banks and their borrowers, which are aiming to reduce mutually-held share portfolios ahead of an introduction of new accounting rules, is also likely to help cap gains.

Japanese companies are required for the first time to account for their share portfolios at market, not book, value starting with their half-year book closings in September.

Merrill, noting the worst may be over for the chip companies, raised its opinion on the global semiconductor sector and upgraded its recommendations on 12 stocks worldwide.

Reuters contributed to this report.